India's government has won a crucial vote in parliament on its controversial plans to open the retail sector to foreign competition.

After a two-day heated debate, MPs in the Lok Sabha (lower house) approved the plan to allow foreign investment of up to 51% in multi-brand retail.

Parliament, which was deadlocked over the issue, resumed business this week after the government agreed to a vote.

The win will help the government push ahead with further economic reforms.

Opposition parties say allowing foreign supermarket chains to set up will put small shops out of business and hurt the poor.

The government says the reforms are needed to revive the slowing economy.

'Benefit farmers'The government victory in the Lok Sabha came about after MPs from the regional Bahujan Samaj Party and the Samajwadi Party walked out ahead of the vote, bringing down the majority required for them to win.

While 253 MPs voted in favour of opening up the retail sector, 218 MPs voted against it.